Ask the experts: April 2011
Question: I have been told I am unable to withdraw anything from my pension scheme until I am 55. How can I unlock its value?
Many people have pension schemes in place which they perhaps started years ago, but haven’t reviewed in a while.
One reason may be that because they have been told they can’t draw the benefits until retirement (minimum age 55), so they have lost interest in what they have already built up.
However, for those in business (either self-employed or company directors), a pension scheme may offer a source of funds to the business before the business owner reaches the age of 55.
Self-invested pension schemes allow investment in commercial property, and it may be possible to use the fund in your existing pension scheme to purchase a share in commercial property which you already own.
In so doing, you can release the value of the pension fund to yourself or your business and still control the property through your pension scheme.
It may be possible to transfer an existing pension fund into a self-invested scheme to facilitate this kind of investment.
Alternatively, in certain circumstances a loan may be made from a self-invested scheme to a company. Provided certain conditions are met, this facility enables company directors to access pension funds and use them in the business.
This is a complex area and it is important that expert advice is sought before proceeding with any proposed transaction, however in the right circumstances existing pension funds offer a valuable tool in business financial planning.
Maurice Arthur, Senior advisor, CBS Astor Buller
Question: As an SME we are looking to refresh our IT infrastructure with room for flexibility and expansion. What are my options regarding technologies like virtualisation over a traditional server?
Servers are now available with higher processing power and virtualisation abilities that offer greater memory than would have been available three to five years ago. If you were to review the resources used by your existing server, such as memory or disk storage, you could well find that your current server is only using between 5% and 20% of its available resource.
To fully capitalise on your IT spend you should consider virtualisation.
Today’s complex software applications can consume resources at different performance levels during the working day. Virtualisation can enable each of these applications to expand as and when they are needed.
When considering IT infrastructure, serious thought must be given to disaster recovery. Should a single server fail which has virtual machines enabled — you will have reduced your downtime as only a new virtual server is required.
The traditional physical build would have required a bare metal restore and then OS reconfiguration but with virtualisation, this is not necessary.
If you have more than two servers on your network, then you may consider replacing it with a two-server cluster.
This would allow for a single failure of one virtual server to transfer over to the remaining virtual server host and thus zero downtime while the repairs are made.
As your business needs grow, you can expand your virtual machines/servers; this could mean adding additional memory or disk space to the current server environment. You could add a new virtual server when required without the need to purchase complete new physical servers therefore making fuller use of the computing power that you have invested in.
With the introduction of 2008R2 SP1, both Microsoft and VMware have solutions to solve all your virtualisation needs.
Mark Kinkead, Technology Manager, Xperience
Question: I have been approached by a telecoms firm who are willing to buy me out of my contract and supply me with a large cashback deals. Are these offers as good as they look and what do I need to watch out for?
I have recently seen another upsurge in ‘business telecoms’ dealers offering up to five-year mobile phone contracts and big buyout/ cashback incentives. But care is needed — not all of telecoms companies involved have the necessary financial stability.
With cashbacks the old saying goes: if it sounds too good to be true, it quite often is. I recommend that all companies do two things before they sign any mobile cashback deal:
- Access your potential dealer’s financial standings with a credit check to see if it has the necessary cashflow;
- Request customer references to check service levels.
Just last month yet another mobile phone supplier went into liquidation, leaving customers with millions of pounds of unpaid cashbacks and buyouts. Such companies often resurface under another name. However, if you follow my two steps, you’ll be able to evaluate the financial stability and the long-term service that you are likely to receive from a potential new supplier.
Adrian McCourt, Director of Barclays Communications